Japan: Positive Outlook for Geothermal Energy

Japan: Land of the rising sun? Part 2 (Renewable Energy Focus)

Geothermal power, which experts believe could satisfy a third of Japan’s energy needs, has stalled at 500 MW of cumulative installed capacity. The FIT level for geothermal is comparable to the solar FIT in generosity, set at JPY 27.3/kWh ($0.22/kWh) for installations above 15 MW and JPY 42/kW ($0.34/kWh) for installations below that level.

Again, siting restrictions are the main barrier as 80% of Japan’s geothermal resource is located in national parks, subject to strict rules on borehole drilling. However, these rules were relaxed significantly in August, and  developers are now allowed to drill in certain areas on the condition that they use diagonal drilling techniques.

Despite on-going cuts to the FIT, the IEA rates Japan’s policy environment for renewables as “strong” and the current FIT regime as “generous”. In addition, the need for new, home-grown generation capacity is likely to remain strong, especially if the nuclear re-start does not go as planned.

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